Which of the Following Methods of Allocating Service Department Costs

Multiple Choice

Which of the following methods of allocating service department costs to user departments is superior?

A) The step down method is superior because it is easy to understand.
B) The direct method is superior because it recognizes the support provided between service departments.
C) The direct and step down methods allocate the same amount of total costs so both methods are comparable.
D) The step down method is superior because it recognizes the support provided between service departments.